Memory and semiconductor stocks, standout winners in the first half of the year, are now losing momentum. Bitcoin, meanwhile, has rebounded from its lowest level in nearly two years, prompting speculation that capital may be rotating out of AI infrastructure and into crypto.
AI Leaders Losing Steam
Data shows the Roundhill Memory ETF (DRAM) more than doubled and the VanEck Semiconductor ETF (SMH) gained 60% in the first half, both closely tied to AI computing demand. However, since hitting record highs on June 22, DRAM has fallen roughly 25%, and SMH is down 12%. At the individual stock level, flash memory maker SanDisk (SNDK) has surged over 530% this year, while Micron Technology (MU) gained more than 230%, though both have seen recent pullbacks.
Bitcoin tells a different story. After dipping below $58,000 on July 1, BTC quickly bounced back above $61,000. The largest Bitcoin ETF, BlackRock's iShares Bitcoin Trust (IBIT), had previously dropped 30% in line with the cryptocurrency's downturn.
Meta's GPU Lease Plan Triggers Ripple Effects
The AI-related sell-off accelerated on Wednesday after Bloomberg reported that Meta Platforms (META) is creating a business unit called Meta Compute to sell excess GPU computing capacity to third parties. The news rattled so-called neocloud providers—firms that lease GPU infrastructure to AI developers, many of which are former Bitcoin miners pivoted to high-performance computing. IREN (IREN), Cipher Digital (CIFR), and TerraWulf (WULF) have each fallen at least 20% from their all-time highs.
"It is too early to call the move a sustained rotation," the article notes. "But after months of capital flowing into AI infrastructure at the expense of crypto, the recent pullback in semiconductor leaders alongside Bitcoin's rebound could be the first indication that investors are beginning to rebalance risk back towards digital assets."